UPDATED, 8:20 PM:Just hours after James Franco’s former management company sued the actor’s ex-rep and his ex-financial adviser for fraud and a litany of other claims, Tanner Mainstain Blatt Glynn & Johnson LLP has fired back with a counterclaim. “JLM, the management company, was rife with internal mismanagement, surreptitious behavior, duplicitousness and questionable ethical acts,” the Hollywood financial management company said in its 7-page filing today in LA Superior Court. “By its Complaint, the management company and its owners seek to make TMBGJ responsible for their own myriad internal shortcomings.” The counterclaim alleges that in desperation to keep The Planet Of The Apes actor as a client, JLM partner and co-founder Randy James looked the other way at his former partner Miles Levy’s supposed skimming of a third of Franco’s commissions from 2006 to late 2013 as well as other indiscretions.

The lawyers for James and fellow plaintiff and former JLM director Ken Jacobson isn’t buying the spirit or the letter of the counterclaim. “This is no defense to the complaint’s allegations that Tanner Mainstain name partner Steve Blatt knowingly facilitated, concealed and profited from Mr. Levy’s theft from the corporation,” plaintiffs’ primary attorney Devin McRae said in a statement after the counterclaim was filed today. “The law doesn’t allow fraudsters to point to the victim and say, ‘It’s your fault I duped you’. This pleading will be shut down quickly.” TMBGJ is represented by attorney Randall Dean of LA film Chapman Glucksman Dean Roeb & Barger.

PREVIOUSLY, 1:06 PM: Last fall my colleague Mike Fleming Jr reported that James Franco and Miles Levy, his manager of almost two decades, had parted ways. Today, according to a multi-claim complaint (read it here) filed in LA Superior Court, we might have a sense of what really happened. “Box office star James Franco’s recently fired talent and financial managers, Defendants Miles Levy and Steve Blatt, conspired to, and did by fraudulent means, embezzle significant sums in commissions due James Levy Management for nearly a decade,” says the filing for a jury trial. It adds dramatically: “The thieves have been caught and the day of reckoning has arrived.”

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Levy is said to have been skimming a third of the 15% Franco has been paying in commissions to the Burbank-based management company since 2006. Alleging breach of contract, fraud and unjust enrichment among other claims, James Levy Management co-founder Randy James and former company director Ken Jacobson have gone after Levy plus big-time Hollywood financial management firm Tanner Mainstain Blatt Glynn & Johnson LLP and partner Blatt for unspecified compensatory, exemplary and punitive damages. They also want an independent accounting, a court declaration of their rights, and an order “removing Levy from office.” The plaintiffs say they discovered this case of sticky fingers on March 20, 2014 and that is why they have brought this legal action now. Obviously, the 50-year friendship and 28-year business partnership between James and Levy has hit a bit of a rocky period to put it mildly.

Essentially, the complaint alleges that the “overcome by greed and other character flaws,” Levy told James and Jacobson in May 2006 that Franco would only be paying 10% commissions, not the previously agreed-upon 15%. The duo accepted this not realizing it was a sleight of hand to push that 5% to a company set up by Levy and Blatt, then Franco’s financial manager. Franco didn’t know either. What the star of Spring Breakers — on which Levy had a producing credit among many Franco films — did discover is that the talent manager was using Franco’s credit cards for “substantial sums” for personal use. The charges were paid from the actor’s money.

It was this discovery that led to Franco cutting both Levy and Blatt loose last year and going without management — a big loss to James Levy. In a December 20, 2013 settlement agreement Levy supposedly kept from his partner James, the manager arranged to have the remaining charges paid out of JLM commissions and not his lifted 5%. Today’s filing says this settlement agreement was how Franco discovered JLM was getting a 10% commission and not the 15% he thought he was paying them. Franco continues to be repped by CAA on the agency front.

The plaintiffs are repped by Devin McRae and Michael Jones of LA firm Early Sullivan Wright Gizer & McRae LLP.

31 Comments

Anonymous • on Apr 18, 2014 8:20 pm

Now why would anyone give a silly manager a PRODUCING credit?
I know it helps him get young girls but come on – no creative
Can producer take 15% and get a Manager credit in addition to fees?
Just asking
What a joke, how or why would anyone hustle Franco – he is a nice guy who comes from a nice family
WONDER where the star hanger on managers grew up mid west came to Holywood to hang out with stars to feel important ???

Ed • on Apr 18, 2014 8:20 pm

Who pays a manager 15% anymore? Only fools.

Operative Word Mainstain • on Apr 18, 2014 8:20 pm

Operative word…MAINSTAIN.

Mojo • on Apr 18, 2014 8:20 pm

Holy need for English class, Batman!

cha cha shoes • on Apr 18, 2014 8:20 pm

Um, they actually refer to James Franco as a “box office star” in the filing? LMAO!

well... • on Apr 18, 2014 8:20 pm

If you look at the movies he’s been in, he’s been in quite a lot of successful ones.

Like, a lot of them.

amanda • on Apr 18, 2014 8:20 pm

No he hasn’t. The more movies he churns out (and he’s churning them out faster than ever and some are going unreleased or go straight to DVD), the lower the percentage of success he has. He’d do well to concentrate on either one or two studio films a year where he actually had success with Rise of the Planet of the Apes or simply take a break and let people miss him before doing another movie. He’s everywhere and people are sick of the sight of him. He could take that time away to take a trip into the bathroom and have a good soak in the tub. He’s looked like he hasn’t done that for a few years now.

Ethan Stone • on Apr 18, 2014 8:20 pm

Hey Amanda:

I co-financed ‘Spring Breakers’ and I can tell you the film was a blockbuster and regardless of Franco’s staring or not…. It did very well!

stealth • on Apr 18, 2014 8:20 pm

Ethan,

I don’t think many would agree with you. His performance, was the talk of Toronto … And beyond…Many believed his star value to finance the film. (Buyers) It was a bonus that it preformed well. shhhhhh… lol.

wellsie • on Apr 18, 2014 8:20 pm

Can you get the director to write a script next time? Because that movie was unwatchable. All hype and no substance.

Berengere French • on Apr 18, 2014 8:20 pm

Ethan,
I totally agree with you. The movie made 7 times the budget and had 8 wins and 7 nominations, so I’d say it was a success. Plus it was a good movie and James Franco is by far one of the best and most talented actors today.

John James • on Apr 18, 2014 8:20 pm

Somebody is thirsty and a bit jealous.

Deepak Moore • on Apr 18, 2014 8:20 pm

people are not sick of him – James Franco is talented and a great guy too. Go back in your rat hole.

Hulia • on Apr 18, 2014 8:20 pm

I’m in my 50’s and I love Franco’s movies/acting! So there! LOL

EdS • on Apr 18, 2014 8:20 pm

Having exited the Longacre theater recently after a preview performance of “Of Mice and Men”, I can attest to the fact that people are definitely NOT sick of the sight of him. You would’ve thought the beatles were in town. it was unreal.

mjrules • on Apr 18, 2014 8:20 pm

In terms of Franco’s own movies that he has directed etc., they’re usually released in some form of platform. I mean, the guy just recently had his own FrancoFest at New York’s IFC Centre.

You seem to be forgetting that the world is a big place and some of his directed movies have had big screen releases around the world. So, even straight to DVD’s will bring him money, as his movies tend to have very small budgets from his own pocket mainly, so in the long run it will be successful.

Example: William Faulkner’s work, his novels are studied at colleges/universities all over the world, so As I Lay Dying which has never been filmed before in 80 years will make money, even if you pick it up from the library.

Franco’s directed movies isn’t usually for short term success but long term and I think most will become classics.

Franco has had great success in blockbuster movies such as the Spiderman series, Rise of the Planet of the Apes (lead) and Oz The Great and Powerful (lead).

Heck, even if you argue the brand is selling the movie not him or someone else, it’s still his name attached to these in some format and so still successful, plus he has had many other successful movies – see Box Office Mojo.

Example: In Spring Breakers which I think he truly deserved an Oscar nomination for at least, without him they wouldn’t be no movie, it ended up becoming Harmony Korine’s highest success to date.

Franco also doesn’t need to go anywhere it’s your choice to watch his movies or follow up on him, but a lot of people appreciate his talents and efforts. As, it has been repeated by others, no one is sick of James Edward Franco, seriously, you can never have enough Franco (you have a choice of three Franco’s too).

In fact, his book signings/art shows generate insane huge crowds. Just see the fans going to Of Mice and Men alone before you state people are sick of him.

By the way, whatever Franco looks like that’s his own business, but the guy has fronted Gucci for many many years, and dresses accordingly in my book but that’s the beauty of opinions. His fans like him just the way he is.

Oh, it’s a real shame regarding this legal case. I remember when Deadline broke the story that Franco departed from his Manger of 20 years, a lot of people were blaming Franco, now the facts seems to be a little bit clearer, we shall all wait to see what happens next.

However, Franco is moving forward as usual, which is cool for his fans.

S.T. • on Apr 18, 2014 8:20 pm

I’ve worked in Hollywood for 18 years & nearly every manager and agent I’ve encountered or worked with is capable of this type of thing. It’s a crooked, toxic profession.

WWE • on Apr 18, 2014 8:20 pm

Marty Jannetty is also suing Miles for copycatting his mullet

MilesThievy • on Apr 18, 2014 8:20 pm

See my user name

A manager • on Apr 18, 2014 8:20 pm

You ignorant moron. You can’t dismiss a whole group of people for the immorality of one bad apple. Pull your head out of your ass.

icallbs • on Apr 18, 2014 8:20 pm

The suit is nonsense. Miles Levy would NEVER “skim” from such a high profile client. Maybe the 5% was a Franco expense fund to handle his off-screen servicing needs. Levy is too smart to have done what is claimed. Something else is happening here. Wait for the next reveal.

Yahoo • on Apr 18, 2014 8:20 pm

Its felony embezzlement, felony theft, he belongs in prison. The firm and actor have no legal obligation to be suspicious of associates contracts.

A former client • on Apr 18, 2014 8:20 pm

I was a client of the company for 3 years. Randy was a decent man (with his own issues). Miles was a complete sleaze ball.

Blatt fan • on Apr 18, 2014 8:20 pm

I am a long time client of tanner Mainstain. These are reputable and good men. Steve Blatt is a caring kind honest guy. I am confidant that he was doing what he was told, by the client. The truth will prevail…miles is the bad guy here. The rest are named for the deep pockets, because miles probably spent and skimmed the money he took.

Dan Tanner • on Apr 18, 2014 8:20 pm

When Steve Blatt was confronted by The Management Firm and was asked what commission was being paid by James Franco for their services, he LIED and said 10%! He knew EXACTLY what he was doing!
When the management firm told Mr. Blatt that they had emails and proof otherwise, he then confessed. And, by the way, Mr. Blatt did this previously with another very large Talent Agency.

Ex TMBGJ Client • on Apr 18, 2014 8:20 pm

Someone should look into TMBGJ – hats off to Mr Franco for being brave enough to go public.

Simple Simon • on Apr 18, 2014 8:20 pm

I agree with you! That accounting firm is shady & someone needs to look into them.
They are also affiliated with an investment firm called AMI. Partners & their family members
Work/own both companies. Partners invest their clients money at AMI which they are not licensed to do.
Watch out!

3rd son • on Apr 18, 2014 8:20 pm

Randy James is one of the upmost honest amazing and best people in this business there is hardly anyone in the business or otherwise who can say different, he now has to protect himself and business from his best friend and partner of 50 years…this has been one of the sleaziest ordeals ever, Randy is such a amazing man

Lee Wasserman • on Apr 18, 2014 8:20 pm

I have had the pleasure of working with Randy James for many years and am saddened to see this happen to him. Randy is one of the most honest men I have known in the industry. I have seen him create amazing careers and maintain his clients for 20 years and beyond. I have sent him clients as well who have been with him for years and have had what they refer to as “the best manager” with Randy. I hope we see that Randy is still an amazing manager who cares about his job and is one of the good guys. Not everyone in the industry are liars. Most of us are good people who care about what we do and who we represent. Randy is an excellent man and I hope he gets through this with plenty of support.

Anonymous • on Apr 18, 2014 8:20 pm

Really? I comment on something political and it gets scrubbed by mods, and this libelous post is still here?